Friday, March 05, 2010

Starve the Beast

Well it looks like the poster-child for failed state agencies doesn't have enough money to keep things going into the next fiscal year:

The Maryland Transit Administration may not have enough money for personnel and operations in next year's budget, legislative analysts warn, but state transit officials insist that they’ll make do with the funding the governor gave them.

Transportation Secretary Beverly Swaim-Staley told the Senate budget committee Thursday that fiscal 2011 will be challenging under Gov. Martin O’Malley’s proposed budget, but she vowed to make it work.

"We have to move things around in the budget, or look at the capital program to meet our needs,” she said.

Now we know that the Transit Administration is possibly the worst-run aspect of Maryland State Government, with a spate of problems throughout the years; failed equipment, unsafe transit lines, services that don't make any money. I have been calling for the senor leadership to be replaced for a long time at the least, and at most to see the entire system privatized so that it can be better managed.

What better way to prove the fiscally reckless manner in which the MTA is being run than the fact that the in the budget submitted for the Governor's approval the agency doesn't have enough money to keep things going.

And what is one reason that the agency is running out of money. Labor unions:

The Department of Legislative Services raised concerns in its analysis of the MTA’s proposed $468 million budget that projected costs of labor contracts could outpace the agency’s funding next year. The document pointed specifically to ongoing negotiations with transit unions.

“There is concern that the fiscal 2011 allowance for MTA is insufficient to support all of the contract increases for services and union personnel expenses in addition to the ongoing expenses of operating a large transit system,” the analysis said.

Here's a memo to MTA leadership; when negotiating these contracts, why not be reasonable? Why not negotiate within your means and try not to spend more than the Governor has allocated for you? Why? Because that's how we operate in the real world. If you are already projecting $468 million in shortfalls because of the contract that is currently under negotiation, you better come up with a plan that will offset that $468 million projection.

Which then leads to the issue of farebox recovery rates, in that the MTA's stated goal is a recovery rate of 35 percent; that means that the goal of the state is to recover only 35 cents of every dollar that it takes to operate the entire transit system.....and MTA right now is only getting a 30 percent recovery rate.

If the MTA were a private business, they would be hemorrhaging money and close their doors within a year with such rates. ...but here in Maryland, such business practices seem to be perfectly acceptable.

If I were in charge of the MTA, I would take steps to make the Agency profitable. There are ways to make the system self-sufficient without making the system unsafe or transit fares unaffordable to average riders. I'm not saying that the MTA needs to have a 150% farebox recovery rate like they do in Hong Kong (on a privatized system, incidentally), but I would make sure that steps were taken in order to move closer to ending the subsidization of of the system.

But I'm not. Instead, MTA senior leadership needs to do the competent thing and spend within their means. With a budget shortfall, there is no room in the budget to throw more good money after bad toward a failing transit administration. General Assembly leadership needs to resist the urge and make the MTA work with less; we need to starve the beast to create efficiencies and costs savings that will finally make the MTA take common sense approaches to improve service.

1 Comments:

Lower income individuals overwhelmingly use public transportation. That is why it is so important to keep prices low. Replace the leadership by all means but raising rates puts strain on the people who can't afford it. What happens when people can't afford the bus anymore? It becomes more difficult for them to get to work and it eats into other areas of their spending. Subsidized transportation keeps people working and productive. Unless you want to car pool with your office's janitor, leave the MTA alone.